Champ Great International Corporation, the family fund of Michael Chiang (chairman of TPK), announced that it has formed a new company, Cambrios Advanced Materials, to continue the research, development, and sales of silver nanowire inks for transparent conductive films, based on the assets of the former Cambrios Technologies. Lux Research recently talked to John LeMoncheck, the CEO of both the new and the former Cambrios, about the restart of the company.
 
John said the former Cambrios was closing a $20 million investment round to pay off a debt due in 2016, but one investor backed out. This was due to an undisclosed customer of both the investor and Cambrios, deciding to delay the use of silver nanowires by one year. This led to the collapse of the fund raising, resulting in Cambrios’ financial stress and going through an assignment for the benefit of creditors (ABC) process.
 
Four companies participated in the auction of Cambrios, and Champ Great, the primary debt holder, purchased the assets for an undisclosed amount. Then, Champ Great restarted Cambrios, based in the same facility as well as with the same management and technology team. John added that the newly formed company is re-engaging with all its previous customers, and is already generating revenue via product shipment.
 
The company had 50 to 60 employees in 2015, 35 employees right before the shutdown, and currently 20 to 25, including some consultants. Compared with the former Cambrios, most laid-off employees are from the marketing team and the sales team.
 
John said it takes time to build new markets for emerging technologies like silver nanowires, but investors are under the pressure of timing their investment returns. The investor fatigue led to the failure of Cambrios Technologies. Champ Great, on the other hand, is a family fund and thus can have longer timelines for financial return.
 
Now, with Champ Great being the only investor, John said Cambrios can continue R&D and focus on building the applications – large-area touch sensors (all-in-one PCs and notebooks) in the near term, flexible touch sensors for curved and flexible displays in the mid-term, and organic photovoltaic and organic light-emitting diode (OLED) lighting in the long term.
 
Cambrios and other electronic user interface (EUI) startups should learn that timing nascent markets is challenging, but while John may pin the shutdown of the old Cambrios on investor fatigue, scaling too quickly in a nascent market was a major contributor. In late 2014, Cambrios had about 40 design wins for large-format displays and about 20 in total for phones and tablets, but they were so financially leveraged that one key deal falling through failed the company.
 
More investment could have kept the company solvent, but would not have fixed the challenges in reaching profitability. The company scaled its manufacturing capability significantly in 2014 and was running at a high burn rate with nearly 60 employees.
 
Cambrios got a second chance, but its investors did not. Champ Great benefited from acquiring best-in-class technology, can absorb longer term risk, and has valuable market connections through TPK. Readers should be wary of being fast followers in EUI start-ups, as increasing a company’s headcount can also increase its risk, but look for opportunities for valuable acquisitions of previously overfunded companies.
 
Tony Sun is an analyst on the Electronic User Interfaces Intelligence and the Wearable Electronics Intelligence team at Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. He holds an M.S. and Ph.D. in physics from Boston College and obtained his B.S. in physics from Peking University in Beijing, China. For more information, visit Lux Research.